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15 May 2023

Intralogistics in Omnichannel Retailing | Shipa Delivery

It’s the new buzzword. The term ‘logistics’ has been around for decades, but ‘intralogistics’ is a relatively recent addition to the supply chain lexicon. 

In this article, we’ll explore the application of intralogistics to omnichannel retailing and take a close look at the role automated fulfillment plays in optimizing the processes involved.

So let’s kick off with a definition of the term.

What is Intralogistics?

Intralogistics is the process of managing the logistical goods and information flows within a warehouse or distribution center by optimizing the use of technology, equipment, and labor.

The benefits of applying intralogistics within the warehouse include:

  • Improved information transfer
  • Better inventory control
  • Faster shipping times
  • Cost reductions

How Intralogistics Works in Omnichannel Retail

Omnichannel logistics expands the traditional logistics processes to combine production, inventory, and distribution across all sales channels, including brick-and-mortar stores, online sites, and social media.

Optimally, all supply-chain stakeholders—manufacturers, distributors, wholesalers, and retailers—should work together to create a streamlined and efficient service to the customer at the end of the supply chain.

The Tools of the Trade

Gone are the days when teams of people poring over spreadsheets could monitor and manage all warehouse processes. The significant swing in consumer behavior to online shopping has put paid to that.

Consumers now expect to shop online day and night for medicines and groceries, clothing and electronics, sports equipment, and furniture—and everything else besides. And they expect, at the very least, same-day delivery of their purchases.

This means that suppliers must always be ready with sufficient inventory. Stock-outs will mean dissatisfied customers, lost sales, and dented reputations. But with orders coming in thick and fast from many directions, inventory shortfalls and errors in order management are inevitable.

The only way for larger retailers to control this frenetic warehouse flow is by applying a technology-based solution—typically a comprehensive warehouse management system (WMS)—that can handle some or all the following processes:

- Inventory visibility

- Remote monitoring

- Transit visibility

- Process engineering

- Systems design

- Project management

- Database design

- Warehouse automation

The Challenges of Omnichannel Intralogistics

In the previous section of this article, we presented a list of warehouse processes. If we accept that each of them is a potential challenge, which they may well be, then we need some intralogistics solutions to meet and surmount them. Here are a few of the possibilities to consider if you plan to apply intralogistics to your omnichannel retail operation.

Inventory Visibility

When products are flying out the doors, it’s critical to track inventory accurately from multiple distribution centers and retail stores. Manual logistics management is unlikely to be robust enough to achieve this. Therefore, the best answer is to automate core aspects of inventory management—for instance, by introducing RFID tags and barcode scanning.

  1. Remote Monitoring

Any WMS worth its salt should include monitoring software that provides remote access from any location. That functionality allows warehouse managers to check in at any time to ensure the receiving, picking, and packing processes in the warehouse are functioning smoothly.

  1. Transit Visibility

In times gone by, a shipper couldn’t track the en-route progress of a shipment after dispatch.

When a shipment went astray, the first indication would probably be when the intended recipient contacted the shipper to notify that it hadn’t arrived. It would then take a flurry of phone calls and emails to locate them—if the shipper was lucky.

With technology-driven tracking systems, both shipper and customer can follow the progress of a package in real-time. Besides providing up-to-the-minute tracking data, omnichannel logistics solutions that use data exchange technology and artificial intelligence can help predict precise delivery times.

  1. On-demand Delivery

Same-day and next-day delivery are today’s benchmarks for logistics standards and unless a company can fulfill orders in these timeframes, they risk losing customers. To help meet this challenge, more and more companies are investing in software that includes advanced delivery tracking capabilities and real-time route and driver optimization.

  1. Returns

The returns process in intra-logistics for omnichannel is as important as the sales and delivery processes. A negative reverse logistics experience will see many consumers switching to other suppliers. 

According to a McKinsey report, 76 % of consumers who had an ‘easy’ or ‘very easy’ returns experience would support that retailer again. By contrast, 33 % of consumers would abandon a retailer if their returns experience was ‘difficult’.

  1. Automated Fulfillment

With many developed countries experiencing labor shortages in the warehousing sector, an increasing number of companies are being forced to turn to automated fulfillment to plug the gaps.

According to McKinsey researchers, retailers are investing heavily in Autonomous Mobile Robots (AMRs) and Automated Guided Vehicles (AGVs). They forecast that the warehouse-automation market will reach $51 billion (USD) by 2030, a CAGR of 23 %.

German toy maker ROFU Kinderland, for example, has constructed a warehouse that provides for the storage of 3,500 types of toys. To meet the logistics challenges of picking so many items from 28,300 bin slots, ROFU’s AutoStore operates 57 robots.

Intralogistics and Automation: The Future has Arrived

With the labor situation in the warehouse industry likely to get worse despite the cash incentives and bonuses being offered to workers, automation is certain to play a significant role in future omnichannel intralogistics. 

There’s no getting past it. Intralogistics is the only way retailers in this modern, on-demand society can control production, inventory, and distribution across all their sales channels.